National Commodity leaders explore Cuba grain market potential

By USGC | July 10, 2015

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Nine farmer leaders and staff members from the U.S. Grains Council, the National Corn Growers Association and the North Dakota Barley Council traveled to Cuba in late June to see first-hand opportunities for expanding U.S. coarse grain exports if trade is fully normalized with the island nation.

The mission was part of an ongoing effort by the grains industry to assess and build plans to address marketing, financial and educational barriers to increase sales to Cuba. As the overseas market development organization for corn, barley, sorghum and grain coproducts, including distillers grains, the Council is considering how best to engage the Cuban market with partnerships and programs.

“Cuba could be a growing market for U.S. corn, but our own policies are standing in the way,” said USGC Chairman Ron Gray. “A major lesson from this trip was that the embargo has created an environment where our competitors such as Brazil dominate the market. If policy allowed us to help develop the Cuban market, we might be able to retake our dominant position.”

Cuba has purchased corn from the United States since the early 2000s, with market share varying widely from as high as 100 percent to just 15 percent last marketing year. The country has purchased distiller’s dried grains with solubles (DDGS), a coproduct of the ethanol manufacturing process, from the United States since 2005. If Cuba purchased all of its imported corn from the United States, it would be the 12th largest overseas market for the product.

The grain industry groups visited with government officials in the Cuban Ministry of Foreign Affairs, Ministry of Agriculture and Ministry of Foreign Trade and Investments. Stops also included a Cuban port and visits to rice and corn operations.

“The Cubans are excited to engage with the United States and want to learn more from the U.S. agriculture industry about poultry and dairy production in particular,” said Rob Elliott, NCGA first vice president. “Hopefully we can continue this dialogue and exchange of ideas that will be beneficial for both countries.”

According to previous USGC assessments, Cuba has no broiler production and limited egg production. And, while imports from the United States are limited by longstanding policy, a lack of dollars and credit challenges, the Cuban government wants its agriculture sector to grow. In addition, the Cuban people and foreign tourists could demand more meat products in their diet as the country’s economy improves.

“We have an opportunity to work with the Cuban people to build their industries and, at the same time, build demand for our grain,” Gray said. “The Council has used this model all over the world, and it’s clear that type of engagement could now also work in Cuba given the right conditions.”

Although there are significant opportunities in this market for U.S. coarse grains and coproducts, current restrictions imposed by the U.S. government severely hinder Cuba’s trade prospects.

"This mission reaffirmed that it’s time for a new U.S. policy toward Cuba, and now is the time to act," Elliott said. "There are several bills before Congress to ease the embargo. NCGA will continue to educate Congress on the importance of the U.S.-Cuba relationship. We are committed to advancing legislation that will reduce trade barriers, normalize trade relations and help us build a two-way trade relationship.”